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Do You Feel like Your Income is too Low to Save Money? Here’s a Possible Solution

Everyone works hard for their salary. You would do your best to be able to pay all of your bills on time, provide for your family and overall, make ends meet given with what you have. However, you still find yourself in a situation where you are unable to save for the rainy days. Worry no more for there is a major alternative to making the most out of your monthly salary. Yes, there are other means when you find yourself in a situation where you need a little bit of help financially. For this article, we’ll discuss one – microinsurance.

What is microinsurance?

Microinsurance is the protection of low-income people against specific perils, in exchange for a regular premium payment proportionate to the likelihood and the cost of the risks involved. Think of it as your financial airbag, ready to take the impact for you should there be an emergency.

Where do I find microinsurance? Where would I apply for one?

Microinsurance is everywhere. Each country has numerous establishments and organizations which offer this type of service. All you have to do is research which financing institutions near you offer microinsurance.

I’ve seen many variations of the word, how should it be written?

Microinsurance may have been practiced for a long time. However, the variations of how it’s typed is fairly new (yet accepted by society). Microinsurance, Micro-Insurance and Micro Insurance are considered correct, all referring to the same concept or type of insurance, so no need to worry if ever you’re looking for literature about this topic for your financial research.

Why should I choose microinsurance over the other money-saving methods?

Before we may answer this question, let us first look at the other ways of saving a certain percentage from our hard-earned money. According to a recent financial report, the following are the usual money-saving procedures:

  • Diversifying activities, assets, and sources of income, including through migration of one or more family members;
  • Informal self-help, investing in different socio-economic and/or identity-based networks;
  • Saving, which allows for self-welfare to cope with future expenses, predicted or not;
  • Emergency credit from formal and informal lenders;
  • Selling assets or reducing consumption to cover the cost of a shock.

These may have been working or have worked in the past. However, they can also have consequences for low-income individuals and families. Diversifying income-earning activities may help lessen financial risk, but may also reduce income-earning ability. When an emergency occurs, depleting savings, selling assets, or reducing expenditures on important goods such as food, healthcare, or education, can hamper your family’s way out of poverty. Resorting to expensive, formal loans can cover immediate costs but leave the family with long-term and heavy obligations that are difficult to pay back. Family and friends can often help but are a limited resource, particularly in low-income communities.

With all of these being said, how can microinsurance help me in the long run?

When faced with an emergency, insurance may cover costs that those existing strategies cannot and help clients avoid strategies or methods which may complicate your current situation, rather than resolve it. Even before the need arises, the security provided by an insurance product may help avoid some costly or otherwise non-preferred risk reducing strategies, such as growing subsistence crops or sending a family member to work abroad. Go for a well-trusted procedure which never fails, and that’s microinsurance.

With all of those being said, be prepared for any financial emergency. Here at Cebuana Lhuillier, we offer a wide array of Microinsurance options, with affordable and simple terms to help every Filipino avail of financial services and privileges that higher-income earners have easy access to and promise to minimize impact of distress and misfortune on one’s financial position. So what are you waiting for? Visit your nearest Cebuana Lhuillier branch now – we assure a fast, easy and secure transaction.

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